AMD's 8-core desktop chip puts it back in the race with Intel

Advanced Micro Devices is looking to get back into the race with Intel with the introduction of its eight-core desktop chip and its new Bulldozer architecture.

The chip manufacturer unveiled Wednesday its FX family of CPUs , which includes the first eight-core desktop processor. These are also the first chips to be released with AMD's Bulldozer architecture.

"AMD has historically been about total performance and not thought to be competitive on power efficiency," said Rob Enderle, an analyst with the Enderle Group. "Bulldozer is a ground up redesign aimed to put AMD back in the race for power efficiency and specifically notebook computers."

This move puts AMD back in the hunt with Intel , a rival that had pulled ahead of AMD in the computer chip market over the last several years. While Intel innovated and moved ahead, AMD had been continually trailing far behind. According to Mercury Research, AMD's share of the microprocessor market grew to 19.4% in the second quarter, up from 17.8% in the same quarter last year. Intel's share was 79.9%. However, AMD is beginning to regain its footing.

"AMD had given the lead for performance to Intel prior to this and seemed to focus on the mainstream market," added Enderle. "The FX is designed to challenge Intel on the performance lead, as well as showcase relative energy efficiency. AMD has reengaged in full competition with Intel and continues on their strategy of being the more affordable solution. This helps put them back in the game, very affordable, very powerful, and they are marketing it."

The FX family of chips are geared to act as high-performance parts for gamers and high-end systems. The chips are based on the new Bulldozer architecture, which AMD touts as providing a speed boost of more than 50% compared with its predecessors.

Dan Olds, an analyst with The Gabriel Consulting Group, said the power boost and the extra cores offer a lot for high-end computer users.

"In a general sense, more cores is better for most users," added Olds. "These chips offer consumers more cores for the dollar than anything on the market today. AMD is offering up to eight-cores running at 3.6 GHz for a retail price of $250, which is quite a value."

However, Olds noted that while AMD's new chips get the company back in the mix, they're "not Sandy Bridge killers," and AMD still has a lot of catching up to do.

"While AMD gets to parity with Intel's Core i5 processors, it's still bested by the higher-end Intel Core i7 chips in terms of performance," he said. "I think PC vendors will take a hard look at these chips for mid-range and lower-end systems where margins are tight, but volumes are lower for the enthusiast market. They'll need to be priced very competitively for AMD to make any headway in this space, since these new processors don't give them a significant performance advantage."

Jim McGregor, an analyst with In-Stat, agrees that AMD's new chips aren't quite up to par with Intel's top-of-the-line i7 990X chips.

"It does offer great performance at a good price," McGregor said. "I think this keeps AMD in the market, but I don't think it will necessarily capture the hearts and minds of the uber gaming enthusiast. In addition, that high end of the market continues to shrink, so AMD is competing for a smaller piece of the pie against a strong competitor that still has a higher performance part in their back pocket."

But Charles King, an analyst with Pund-IT, noted that AMD is coming out with its lower-cost, high-end chip right before the holiday buying season and that should give AMD a revenue boost.

"How long that will last remains to be seen," noted King. "From what I've seen, AMD is promoting the new chips' performance as being somewhere between the Core i5 2500k and the Core i7 2600k, but with a price well below the i7."

That price difference, especially in a struggling economy where enterprises are trying to cut costs wherever they can, puts AMD's new FX chips on a much more equal footing with Intel than the company has enjoyed in some time, according to King.

"And I expect to see the new CPUs in a host of high-end gaming and visualization systems in time for the holidays," King said. "But the delivery timing also means Bulldozer is arriving shortly before the next "tock" in Intel's evolutionary upgrade clock, meaning that whatever benefits AMD enjoys could be relatively short-lived."

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